eBay Begins Payments Journey in US, Will Go International in 2019

eBay CEO Devin Wenig tweeted yesterday that the company had begun rolling out managed payments (MP) on Monday to the “thousands of sellers” who had opted in, and today, eBay issued an official press release with more information about the process of taking over payment processing on its platform – including news that it would begin rolling out MP internationally in 2019.

Steve Fisher, eBay Senior Vice President of Payments (formerly Chief Technology Officer), said, “In less than eight months since announcing our initiative, we’ve moved rapidly to build our back-end payments platform, engage thoughtfully with our seller community to solicit their input and line up new forms of payment – all of which has led to the introduction of managed payments.

“Looking ahead to 2019, we will expand our new experience to more buyers and sellers in the US and begin rolling out our new payments experience outside the US.”

For sellers, eBay MP has enormous ramifications. Rather than paying sellers, buyers will pay eBay, which will then disburse payments to sellers. It’s a path Etsy took, and sellers have reason to be concerned. Not only can waiting for marketplace disbursements impact cash flow, but if eBay follows Etsy’s path, it will deduct seller fees before issuing disbursements. See this AuctionBytes Blog post from April to hear why many sellers think that hurts them.

In addition, the initial launch of eBay MP has some major limitations – sellers can’t use eBay Global Shipping or other tools that rely on eBay APIs at this time, and eBay won’t be including PayPal on eBay MP listings until the summer of 2019.

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It’s important to note that eBay doesn’t want to exclude PayPal as a “payment method,” rather, it appears eBay is unable to integrate PayPal into Managed Payments at this point.

While it’s prudent for eBay to launch managed payments in stages, it’s also mandated by operating agreements it entered into with PayPal when the two companies split in 2015.

In Tuesday’s announcement, eBay stated, “The goal of managed payments is to drive significant benefits and efficiencies for eBay’s hundreds of millions of global customers.” But it’s clearly also much more profitable for eBay than its current system, given what we know about Etsy’s transition to managed payments.

Aside from MP being more profitable for eBay, it also provides some benefits to users: eBay will be able to eventually provide consumers greater choice in payment options at checkout, which could help boost sales for sellers.

Here’s how eBay explained the benefits to sellers and buyers in today’s announcement:

In the new managed payments experience, Sellers will benefit from a simplified pricing structure, more predictable access to their funds, and better visibility into sales and payouts. Specifically:

– Most sellers can expect lower overall selling costs in the new payments experience.

– Sellers will no longer be paid directly from buyers via PayPal; instead, payouts will be sent directly to sellers’ bank accounts.

– Sellers will benefit from consolidated billing, with all fees for selling and payments in one invoice, and centralized customer service.

– Sellers do not need to do anything to enable new forms of payments for buyers.

– For buyers, eBay will provide consumers greater choice in payment options at checkout. In July, the company announced that Apple Pay would be among the first mobile forms of payment offered in its new payments experience. Today, buyers can use Apple Pay to purchase items on their mobile devices from sellers participating in the initial phase of the new payments experience.

eBay said it would continue to expand managed payments to buyers and sellers over time and expects to have transitioned a majority of its Marketplace customers to its new payments experience in 2021.

Join the discussion about eBay’s launch of Managed Payments on Monday’s EcommerceBytes Blog post, and send us your thoughts along with screenshots if you encounter eBay MP as a buyer or seller. (Note that it will be challenging to identify managed payments as a buyer – one indication will be the lack of PayPal as a payment option.)

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

I read the press release expounding on the benefits of the new Managed Payments “experience” and can’t see any substantial advantages over the current process, except that eBay makes more money and gains additional control over everything I do as a Seller.
So let me understand this – eBay presently accepts PayPal from 100% of its Sellers, yet is unable to integrate PayPal into Managed Payments at this point in time. Are you kidding me? Shouldn’t PayPal be the first payment method integrated into the new system? Just like everything eBay touches, they seem to make it a point to do it ass-backward and inflict as much pain as possible on their Sellers.
I don’t buy eBay’s BS that the new Managed Payments “experience” will result in lower costs for most Sellers. Just exactly what does that mean? I think I know – they will temporarily charge a fraction less than what PayPal charges in fees to make up for the sheer chaos they cause Sellers. The moment they fully integrate Managed Payments into their system for all Sellers, they will issue a Spring or Fall Seller update which announces a fee increase (that ends up being well above the PayPal rate).
Also, why in the world do I want eBay managing my money? I would have more confidence in giving my 7 year-old niece access to my bank account than I would eBay.
Why would I want payments going directly to my bank account instead of PayPal? I don’t want to co-mingle funds so now I need to go out and open a new bank account just for eBay.
I had everything I needed with PayPal and now eBay is forcing another unwanted program down my throat and I AM NOT AN HAPPY CAMPER!
MARK MY WORDS: THE ROLLOUT OF MANAGED PAYMENTS BY EBAY WILL BE AN UNMITIGATED DISASTER!
P.S. – Am I correct in my interpretation that eBay (under Managed Payments) will be holding the S/H portion of payments for 2-4 days (or more) before depositing the funds into the Sellers account? If this is true, then countless Sellers (like me) who were forced to accept 1 day handling time (to maintain their Top Rated Seller status) are now going to be required to ship prior to receiving 100% of the buyers payment??????? I hope this is nothing more than a bad joke?

It’s amazing that for years eBay has stressed that the only “safe” way to pay was through PayPal. Now, not so much I guess. I agree that integrating PayPal into MP should have been a priority before the Beta version was unveiled.

@Timbo – I was reading a thread on the eBay discussion boards regarding MP, and it does appear that, at least initially, eBay expects the sellers in the Beta test to ship their purchased items before they ever see a penny of their money. An individual who appeared to have knowledge of the program said that it is likely (or words to that effect) that this would change in the future, but for now at least, you ship and then get paid a few days later. I know this is going to make many sellers extremely unhappy.

Ecommerce EKG

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